Additional information for the plumbing partnership business:
1 At 31 March 2020 there was cash on hand (contract income not banked) of $2300, GST inclusive.
2 Accounts receivable for plumbing work as at 31 March 2020 amounted to $4,600, GST inclusive.
3 Accounts payable at 31 March 2020 were for purchases of plumbing materials, $2,760; advertising, $230, PAYE of $460 and motor vehicle expenses, $368. These amounts are GST inclusive, as applicable.
4 During the year plumbing materials of $1,380, GST inclusive, were taken from the business for Kevin to complete private plumbing work around his private house.
5 Inventory at 31 March 2020 was $4,250, cost price GST exclusive.
6 “Entertainment” relates to entertaining clients at local restaurants and cafes, $1,200 and renting a corporate box at Westpac Stadium for a “Super 15 Rugby match”, $2,800 for major clients. Food and drinks were served at the corporate box during the game.
7 Sponsorship is for purchasing T-Shirts for Kevin’s son’s junior hockey team. The T-Shirts don’t have the firm’s name imprinted on them. No formal contract is in place for the sponsorship.
8 Insurance payments were for:
· Health and accident policies for Kevin and Mike, equally – total $3,600. The partners are to receive any entitlements arising from claims against these policies.
· Loss of business profits - $1,750.
· Plant, machinery and inventory (business) - $2,400.
9 Interest paid relates to:
· Interest on initial capital contributed by Kevin, $2,000; and Mike, $2,000
· Interest on Kevin’s advance (for business purposes) - $600 (No RWT deducted)
· Interest on temporary bank overdraft, $460.
10 A proper logbook kept 2 years ago established 72% business usage.
11 Repairs and maintenance comprise:
· Leasehold improvements: Major building alterations to the office to enlarge the area and include a kitchen – building work, $10,000; electrical work, $1,500. This work was carried out and completed in May 2019.
Painting the internal office area, $1,500, on 30